EXHIBIT 1.1
CONVERIUM FINANCE S.A.
(a societe anonyme incorporated in Luxembourg)
Guaranteed Subordinated Notes due 2032
Unconditionally Guaranteed on a Subordinated Basis by each of
CONVERIUM HOLDING AG
(a company incorporated in Switzerland)
and
CONVERIUM AG
(a company incorporated in Switzerland)
UNDERWRITING AGREEMENT
Dated: December -, 2002
CONVERIUM FINANCE S.A.
(a societe anonyme incorporated in Luxembourg)
Guaranteed Subordinated Notes due 2032
$[-]
Unconditionally Guaranteed on a Subordinated Basis by each of
CONVERIUM HOLDING AG
(a company incorporated in Switzerland)
and
CONVERIUM AG
(a company incorporated in Switzerland)
UNDERWRITING AGREEMENT
December -, 2002
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
J.P. MORGAN SECURITIES INC.
as Representatives of the several Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Converium Finance S.A., a societe anonyme incorporated in Luxembourg
(the "COMPANY"), confirms its agreement (this "UNDERWRITING AGREEMENT") with
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MERRILL LYNCH") and J.P.
Morgan Securities Inc. ("J.P. MORGAN") and each of the other Underwriters named
in Schedule A hereto (collectively, the "UNDERWRITERS", for whom Merrill Lynch
and J.P. Morgan are acting as representatives (in such capacity, hereinafter
referred to as the "REPRESENTATIVES"), with respect to (i) the issue and sale by
the Company and the purchase by the Underwriters, acting severally and not
jointly, of the respective principal amount of the Company's [-]% Guaranteed
Subordinated Notes due 2032 (the "FIRM SECURITIES") set forth opposite their
names in Schedule A hereto and (ii) the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase up to $[-] aggregate principal amount of the
[-]%
Guaranteed Subordinated Notes due 2032 (the "ADDITIONAL SECURITIES") to
cover over-allotments, if any. The Firm Securities and the Additional Securities
are hereinafter collectively referred to as the "SECURITIES". The Securities are
to be issued pursuant to an indenture (the "INDENTURE"), to be dated as of the
date on which the Closing Time referred to in Section 2(c) hereof occurs (such
date, the "CLOSING DATE"), among the Company, Converium Holding AG, a joint
stock company incorporated in Switzerland ("CONVERIUM HOLDING"), Converium AG, a
joint stock company incorporated in Switzerland ("CONVERIUM AG" and, together
with Converium Holding, the "GUARANTORS") and JPMorgan Chase Bank, a New York
banking corporation organized and existing under the laws of the State of New
York, as trustee (the "TRUSTEE"). Pursuant to the Indenture, each of Converium
Holding and Converium AG will guarantee on an unsecured, subordinated and joint
and several basis (the "SUBORDINATED GUARANTEE"), the payment of amounts owing
by the Company with respect to the Securities and the Subordinated Guarantee
will be endorsed on each Security on the terms set forth under the Indenture.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Underwriting Agreement has been executed and delivered and the Indenture
has been qualified under the Trust Indenture Act of 1939, as amended (the "1939
ACT").
The Company and the Guarantors have filed with the Securities and
Exchange Commission (the "COMMISSION") a registration statement on Form F-1 (No.
333-101169) covering the registration of the offering of the Securities under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), including a
related Preliminary Prospectus (as defined below). Promptly after execution and
delivery of this Underwriting Agreement, the Company will either (i) prepare and
file a prospectus in accordance with the provisions of Rule 430A ("RULE 430A")
of the rules and regulations of the Commission under the Securities Act (the
"SECURITIES ACT REGULATIONS") and paragraph (b) of Rule 424 ("RULE 424(B)") of
the Securities Act Regulations or (ii) if the Company has elected to rely upon
Rule 434 ("RULE 434") of the Securities Act Regulations, prepare and file a term
sheet (a "TERM SHEET") in accordance with the provisions of Rule 434 and Rule
424(b). The information included in such prospectus or in such Term Sheet, as
the case may be, that was omitted from such registration statement at the time
it became effective but that is deemed to be part of such registration statement
at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "RULE 430A INFORMATION" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "RULE 434 INFORMATION." The Preliminary Prospectus dated
December 11, 2002 is herein called the "PRELIMINARY PROSPECTUS." The
registration statement, including the exhibits thereto and schedules thereto at
the time it became effective (but excluding any Statement of Eligibility on Form
T-1) and including any Rule 430A Information and the Rule 434 Information, as
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applicable, is herein called the "REGISTRATION STATEMENT." Any registration
statement filed pursuant to Rule 462(b) of the Securities Act Regulations is
herein referred to as the "RULE 462(B) REGISTRATION STATEMENT," and after such
filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus, in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "PROSPECTUS." If Rule 434 is relied on, the term "Prospectus" shall
refer to the Preliminary Prospectus together with the Term Sheet and all
references in this Underwriting Agreement to the date of the Prospectus shall
mean the date of the Term Sheet.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY, CONVERIUM HOLDING AND
CONVERIUM AG. The Company, Converium Holding and Converium AG jointly and
severally represent and warrant to each Underwriter as follows:
(a) Compliance with Registration Requirements. The
Registration Statement has become effective under the Securities Act
and no stop order suspending the effectiveness of the Registration
Statement is in effect and no proceedings for that purpose are pending
or, to the knowledge of the Company, Converium Holding or Converium AG,
threatened by the Commission.
The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder, and
(iii) the Prospectus does not contain and, as amended or supplemented,
if applicable, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this paragraph 1(a) shall not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information
relating to any Underwriter or the conduct of the offering by the
Underwriters furnished to the Company in writing by or on behalf of
such Underwriter through the Representatives expressly for use therein
and described in Schedule D hereto (the "UNDERWRITER INFORMATION").
Each Preliminary Prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed
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pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the applicable provisions of the
Securities Act and the applicable rules and regulations of the
Commission thereunder.
(b) Status of the Company, Converium Holding and Converium AG.
Each of the Company, Converium Holding and Converium AG has been duly
organized and is validly existing under the laws of the jurisdiction of
its incorporation and has corporate power and authority to own and
lease its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Underwriting Agreement, the Indenture and the Subordinated Guarantee,
as applicable, and each of the Company, Converium Holding and Converium
AG is duly qualified as a foreign corporation to transact business and
is in good standing in all other jurisdictions in which the conduct of
its business or the ownership or leasing of property requires such
qualification, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect. As used herein,
"MATERIAL ADVERSE EFFECT" means a material adverse change in the
condition, financial or otherwise, or in the earnings or business
affairs of the Company, Converium Holding and Converium AG and their
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business.
(c) Status of Subsidiaries. Each subsidiary of Converium
Holding, Converium AG and the Company (i) has been duly incorporated,
(ii) is validly existing under the laws of the jurisdiction of its
incorporation and (iii) has the corporate power and authority to own or
lease its property and to conduct its business as described in the
Prospectus, except in each case as would not have a Material Adverse
Effect; all of the issued shares in the capital of each Significant
Subsidiary (as defined below) have been duly and validly authorized and
issued, are fully paid and non-assessable and, except as disclosed in
the Prospectus, are owned directly or indirectly by Converium Holding,
free and clear of all liens, encumbrances, equities or claims.
(d) Authorization of Underwriting Agreement. This Underwriting
Agreement has been duly authorized, executed and delivered by the
Company, Converium Holding and Converium AG.
(e) Authorization of the Indenture. The Indenture has been
duly authorized by the Company, Converium Holding and Converium AG and
duly qualified under the 1939 Act and, when duly authorized, executed
and delivered by the Company, Converium Holding, Converium AG and the
Trustee, will constitute a valid and binding agreement of the Company,
Converium Holding and Converium AG, enforceable against
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the Company, Converium Holding and Converium AG in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law).
(f) Authorization of the Securities. The Securities have been
duly authorized and, at the Closing Time, will have been duly executed
by the Company and, when authenticated, issued and delivered in the
manner provided for in the Indenture and delivered against payment of
the purchase price therefor as provided in this Underwriting Agreement,
will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law), and will be in the form contemplated by, and
entitled to the benefits of, the Indenture.
(g) Authorization of the Subordinated Guarantee. The
Subordinated Guarantee has been duly authorized and, when executed and
delivered by each of Converium Holding and Converium AG in accordance
with the provisions of the Indenture and when the Securities are
delivered to and paid for by the Underwriters in accordance with the
terms of this Underwriting Agreement and the Subordinated Guarantee
duly endorsed thereon, will be valid and binding obligations of each of
Converium Holding and Converium AG, enforceable in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or law).
(h) Description of the Securities, the Indenture and the
Subordinated Guarantee. The Securities, the Indenture and the
Subordinated Guarantee will conform in all material respects to the
descriptions thereof as to legal matters contained in the Prospectus
and will be in substantially the respective forms filed as exhibits to
the Registration Statement.
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(i) Capitalization. The share capital of Converium Holding and
Converium AG conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus.
(j) No Violation or Default. None of Converium Holding,
Converium AG, the Company or any of their Significant Subsidiaries (as
defined below) is (i) in violation of its respective Articles of
Incorporation or other charter documents or by-laws, (ii) in default
and no event has occurred which, with notice or lapse of time or
otherwise, would constitute such a default, in the due performance or
observance of any material term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound
or to which any of its properties or assets is subject (collectively,
"AGREEMENTS AND INSTRUMENTS") or (iii) in violation of any law,
ordinance, governmental rule, regulation or decree of any court,
government or governmental agency or body having jurisdiction over
Converium Holding, Converium AG or the Company or any of their
subsidiaries or over their respective properties, except, with respect
to clauses (ii) and (iii), for any violations or defaults that would
not have a Material Adverse Effect.
(k) No Conflicts. The execution and delivery by each of
Converium Holding, Converium AG and the Company of each of this
Underwriting Agreement, the Indenture, the Securities and the
Subordinated Guarantee; the performance by each of Converium Holding,
Converium AG and the Company of its obligations under each of this
Underwriting Agreement, the Indenture, the Securities and the
Subordinated Guarantee; and the issuance and delivery of the Securities
to be delivered pursuant to this Underwriting Agreement will not
constitute a Repayment Event (as defined below) under the Agreements
and Instruments and will not contravene (i) any provision of applicable
law, (ii) the Articles of Incorporation of Converium Holding, Converium
AG or the Company, (iii) any agreement or other instrument binding upon
Converium Holding, Converium AG or the Company or any of their
subsidiaries or (iv) any judgment, order or decree of any governmental
body, agency or court having jurisdiction over Converium Holding,
Converium AG or the Company or any of their subsidiaries except as in
the case of clauses (i), (iii) and (iv) above any such contravention
would not have a Material Adverse Effect. No consent, approval,
authorization, order, registration, clearance or qualification of or
with any such court or governmental agency or body, or any stock
exchange authority having jurisdiction over Converium Holding,
Converium AG or the Company is required for the sale and delivery of
the Securities to be delivered pursuant to this Underwriting Agreement,
the performance by Converium Holding, Converium AG or the Company of
their obligations under this
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Underwriting Agreement, the Indenture, the Securities or the
Subordinated Guarantee, as the case may be, and the consummation of the
transactions herein and therein contemplated, except (i) such as may be
required by the securities or "blue sky" laws of the various states of
the United States in connection with the offer and sale of the
Securities, (ii) such as have been obtained under the Securities Act
and the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), (iii) such as have been obtained under applicable insurance and
reinsurance laws and regulations, (iv) such as have been obtained under
the applicable listing criteria of the NYSE and (v) such as have made
or obtained on or prior to the Closing Date or the Date of Delivery, as
the case may be, (or, if not required to be made or obtained on or
prior to the Closing Date or the Date of Delivery, as the case may be,
that will be made or obtained when required). As used herein, a
"REPAYMENT EVENT" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
Converium Holding, Converium AG or the Company or any of their
subsidiaries.
(l) Absence of Labor Dispute. No material labor dispute with
the employees of Converium Holding, Converium AG or the Company or any
of their Significant Subsidiaries exists or, to the knowledge of each
of Converium Holding, Converium AG or the Company, is threatened.
(m) Absence of Proceedings. There are no legal or governmental
proceedings pending or, to the knowledge of each of Converium Holding,
Converium AG or the Company, threatened to which Converium Holding,
Converium AG or the Company or any of their Significant Subsidiaries is
a party or to which any of the properties of Converium Holding,
Converium AG or the Company or any of their Significant Subsidiaries is
subject that are required to be described in the Registration Statement
or the Prospectus and are not so described or of any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described
or filed as required.
(n) No Material Adverse Change in Business. There has not
occurred any material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings or business
affairs of Converium Holding, Converium AG or the Company and their
subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business, from that set forth in the Prospectus (exclusive of
any
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amendments or supplements thereto subsequent to the date of this
Underwriting Agreement).
(o) Possession of Intellectual Property. Except as described
in the Prospectus, Converium Holding, Converium AG and the Company and
their subsidiaries own or possess, or can acquire on reasonable terms,
all licenses, copyrights, trademarks, service marks and trade names
currently employed by them in connection with the business now operated
by them as described in the Prospectus, except where failure to possess
such licenses, copyrights, trademarks, service marks and trade names
would not, singly or in the aggregate, have a Material Adverse Effect;
and none of Converium Holding, Converium AG or the Company or any of
their subsidiaries has received any notice of infringement or conflict
with asserted rights of others with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(p) Possession of Licenses and Permits. Converium Holding,
Converium AG and the Company and their subsidiaries are duly qualified
to transact business and possess all certificates, authorizations and
permits issued by the appropriate regulatory authorities necessary to
conduct the business of Converium Holding, Converium AG and the Company
and their subsidiaries taken as a whole as described in the Prospectus,
except where failure to be so qualified or possess such certificates,
authorizations and permits would not, singly or in the aggregate, have
a Material Adverse Effect; and, for the avoidance of doubt, each of
Converium Holding, Converium AG and the Company and each subsidiary of
Converium Holding, Converium AG and the Company listed on Schedule C
hereto (each a "SIGNIFICANT SUBSIDIARY") required to be so licensed is
duly licensed as a reinsurance company or an insurance company in its
jurisdiction of incorporation and domicile, and, except as would not
reasonably be expected to have a Material Adverse Effect, is duly
licensed or authorized as an insurer or a reinsurer in each other
jurisdiction where it is required to be so licensed or authorized to
conduct its business as described in the Prospectus; and none of
Converium Holding, Converium AG or the Company or any of their
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any qualification, certificate,
authorization or permit except where the loss or revocation of any such
qualifications, certificates, authorizations and permits would not,
singly or in the aggregate, have a Material Adverse Effect.
(q) Financial Statements. The historical combined financial
statements of Converium Holding and its consolidated subsidiaries
included in the Registration Statement and the Prospectus, together
with the related notes, present fairly the financial position of
Converium
8
Holding and its consolidated subsidiaries at the dates indicated and
the balance sheets, statements of income, statements of cash flows and
statements of changes in equity of Converium Holding and its
consolidated subsidiaries for the periods specified giving effect to
the transactions described in the notes thereto; such financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States ("U.S. GAAP") applied on a
consistent basis throughout the periods involved, except as otherwise
indicated in the Registration Statement and the Prospectus; the
historical combined financial statements of Converium Holding and its
consolidated subsidiaries included in the Registration Statement and
the Prospectus, together with the related notes, comply in all material
respects with the requirements of Form F-1 and the rules and
regulations of the Commission relating thereto.
(r) No Stabilization. None of Converium Holding, Converium AG
or the Company or any of their subsidiaries or any person acting on
their behalf has taken, directly or indirectly, any action which caused
or resulted, or was designed to, or which has constituted or which
might reasonably be expected to cause or result in, the stabilization
or manipulation of the price of the Securities to facilitate the sale
or resale of the Securities; provided, however, that this provision
shall not apply to any stabilization activities conducted by the
Underwriters, who respectively shall remain solely responsible
therefor.
(s) No Switzerland or Luxembourg Taxes. (i) The Securities
will be created, issued and delivered, and this Underwriting Agreement,
the Indenture, the Securities and the Subordinated Guarantee will be
executed and delivered and the obligations therein performed, by the
Company, Converium Holding and Converium AG without withholding or
deducting for any taxes, duties or other charges of whatever nature of
Switzerland or Luxembourg or any political subdivision or authority
thereof or therein having power to tax.
(ii) Other than as described in the Prospectus, there
is no ad valorem stamp duty, stamp tax, stamp duty reserve tax
or issue, documentary, certification or other similar tax
imposed by any government department or other taxing authority
of or in Switzerland or Luxembourg, in connection with (A) the
issuance of Securities to be delivered pursuant to this
Underwriting Agreement, (B) the sale and transfer of
Securities to or for the respective accounts of the
Underwriters or (C) the sale and delivery of Securities by the
Underwriters to those purchasing such Securities from such
Underwriters in each case in the manner contemplated by the
Prospectus.
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(t) Investment Company Act. None of the Company, Converium
Holding and Converium AG is, and after the issuance and sale of the
Securities as described in the Prospectus none of them will be, an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 ACT").
2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING. (a) Firm Securities. On
the basis of the representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter and each Underwriter, severally and not jointly, agrees to purchase
from the Company on the Closing Date, at the price set forth in Schedule B, the
aggregate principal amount of Firm Securities set forth in Schedule A opposite
the name of such Underwriter, plus any additional principal amount of Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof.
(b) Additional Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the
terms and conditions herein set forth, the Company hereby grants an
option to the Underwriters, severally and not jointly, to purchase up
to an additional $[-] aggregate principal of the [-]% Guaranteed
Subordinated Notes due 2032 at the price set forth in Schedule B. The
option hereby granted will expire 30 days after the date hereof and may
be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the
offering and distribution of the Firm Securities upon notice by the
Representatives to the Company setting forth the number of Additional
Securities as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such
Additional Securities. Any such time and date of delivery (a "DATE OF
DELIVERY") shall be determined by the Representatives, but shall not be
later than seven full business days after the exercise of said option,
nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Additional
Securities, each of the Underwriters, acing severally and not jointly,
will purchase that proportion of the total number of Additional
Securities then being purchased which the number of Firm Securities set
forth in Schedule A opposite the name of such Underwriter bears to the
total number of Firm Securities, subject in each case to such
adjustments as the Representatives in their discretion shall make to
eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery
of certificates for, the Firm Securities shall be made at the offices
of Davis Polk & Wardwell, 99 Gresham Street, London EC2V 7NG, or at
such
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other place as shall be agreed upon by the Representatives and the
Company, at 2:00 P.M. (London time) on the third business day after the
date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after
such date as shall be agreed upon by the Representatives and the
Company (such time and date of payment and delivery being herein called
"CLOSING TIME").
In addition, in the event that any or all of the Additional
Securities are purchased by the Underwriters, payment of the purchase
price for, and delivery of certificates for, such Additional Securities
shall be made at the above-mentioned offices, or at such other place as
shall be agreed upon by the Representatives and the Company, on each
Date of Delivery as specified in the notice from the Representatives to
the Company.
Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the
Company, against delivery to such persons designated by the
Representatives for the respective accounts of the Underwriters of one
or more certificates in global form for the Securities to be purchased
by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for,
and make payment of the purchase price for, the Firm Securities and the
Additional Securities, if any, which it has agreed to purchase. Merrill
Lynch, individually and not as representative of the Underwriters, may
(but shall not be obligated to) make payment of the purchase price for
the Firm Securities or Additional Securities, if any, to be purchased
by any Underwriter whose funds have not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Firm
Securities and the Additional Securities, if any, shall be in such
denominations ($25 or integral multiples thereof) and registered in
such names as the Representatives may request in writing at least one
full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Firm Securities
and the Additional Securities, if any, will be made available for
examination and packaging by the Representatives in London not later
than 1:00 P.M. (London time) on the business day prior to the Closing
Time or the relevant Date of Delivery, as the case may be.
3. COVENANTS OF THE COMPANY, CONVERIUM HOLDING AND CONVERIUM AG. In
further consideration of the agreements of the Underwriters herein contained,
each of the Company, Converium Holding and Converium AG covenants with each
Underwriter as follows:
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(a) Communications. To advise the Representatives, on behalf
of the Underwriters, promptly after it receives notice thereof, of any
communications received by the Company, Converium Holding or Converium
AG from the New York Stock Exchange or from any regulatory agency or
authority, that could prevent, delay, suspend or otherwise adversely
affect the offering and sale of the Securities as contemplated herein
or the distribution or use of any Prospectus and to furnish to the
Representatives two copies of any such written communications.
(b) Filing Of Amendments. Before amending or supplementing the
Registration Statement or the Prospectus, to furnish to the
Representatives a copy of each such proposed amendment or supplement
and not to file any such proposed amendment or supplement to which the
Representatives reasonably object, and to file with the Commission
within the applicable period specified in Rule 424(b) under the
Securities Act any prospectus required to be filed pursuant to such
Rule.
(c) Delivery Of Registration Statements. To furnish the
Representatives, without charge, two signed copies of the Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to the Representatives in the
locations specified by them, without charge, as promptly as practicable
following the execution of this Underwriting Agreement and during the
period mentioned in paragraph (d) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as they may reasonably request.
(d) Compliance With Securities Law. To comply with the
Securities Act and the Securities Act Regulations, the Exchange Act and
the rules and regulations thereunder and the 1939 Act and the rules and
regulations thereunder so as to permit the completion of the
distribution of the Securities as contemplated in this Underwriting
Agreement and in the Prospectus; and if, during such period after the
first date of the public offering of the Securities as in the opinion
of nationally recognized counsel for the Underwriters the Prospectus is
required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of nationally recognized counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus
to comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and
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to the dealers (whose names and addresses the Representatives will
furnish to the Company) to which Securities may have been sold by the
Representatives on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with the Securities Act and other
applicable law.
(e) Blue Sky Qualifications. To endeavor to qualify the
Securities for offer and sale under the securities or "blue sky" laws
of such jurisdictions as the Representatives shall reasonably request;
provided, that in connection therewith, none of the Company, Converium
Holding or Converium AG shall be required to qualify as a foreign
corporation or to file a general consent to service of process in any
such jurisdiction.
(f) Rule 158. To make generally available to the Company's
security holders and to the Representatives as soon as practicable an
earning statement covering the twelve-month period ending December 31,
2002 that satisfies the provisions of Section 11(a) of the Securities
Act and the rules and regulations of the Commission thereunder.
(g) Use Of Proceeds. The Company will on-loan to or invest in
Converium Holding, or a "company controlled by" (as defined in Rule
3a-5 of the 1940 Act) Converium Holding, at least 85% of the net
proceeds received by it from the sale of the Securities within six
months after the net proceeds are received by the Company, and will
otherwise operate on an ongoing basis in a manner that complies with
Rule 3a-5 of the 1940 Act.
(h) 1940 Act. None of the Company, Converium Holding or
Converium AG will become an "investment company" as such term is
defined in the 1940 Act for a period of three years following the
Closing Date.
(i) Listing. The Company will use its best efforts to effect
the listing of the Securities on the New York Stock Exchange.
(j) Restriction On Sale Of Securities. During a period of 30
days from the date of the Prospectus, the Company, Converium Holding
and Converium AG will not, without the prior written consent of the
Representatives, issue any Securities, or any security substantially
similar to the Securities.
13
(k) Ratings. The Company, Converium Holding and Converium AG
shall use its best efforts to take all reasonable action necessary to
enable Standard & Poor's Ratings Service, a division of McGraw Hill,
Inc. ("S&P"), and Moody's Investors Service, Inc. ("MOODY'S") to
provide their respective ratings of the Securities.
(l) Clearance and Settlement. The Company, Converium Holding
and Converium AG will cooperate with the Underwriters and take all
reasonable action necessary to permit the Securities to be eligible for
clearance and settlement through the facilities of The Depository Trust
Company ("DTC"), Euroclear Bank S.A./N.V. as operator of the Euroclear
system ("EUROCLEAR"), and Clearstream Banking societe anonyme, Italy,
Luxembourg ("CLEARSTREAM").
(m) The Company, Converium Holding and Converium AG shall at
the reasonable request of the Underwriters at any time prior to
completion (in view of the Underwriters) of distribution of the
Securities, amend or supplement the Prospectus in order to comply with
Monetary Authority of Singapore (the "MAS") requirements and deliver to
the Underwriters from time to time as many copies of the relevant
amendment or supplement as the Underwriters may reasonably request.
4. COVENANTS OF THE UNDERWRITERS. (a) Each Underwriter, severally and
not jointly, acknowledges to Converium Holding, Converium AG and the Company
that no action has been or will be taken in any jurisdiction, except in the
United States, that would permit a public offering of the Securities, or the
possession, circulation or distribution of this Prospectus or any material
relating to Converium Holding, Converium AG and the Company or the Securities,
in any jurisdiction where action for that purpose is required.
(b) Each Underwriter, severally and not jointly, agrees that it will
not offer or sell the Securities, nor will it make the Securities the subject of
an invitation for subscription or purchase, nor will it circulate or distribute
the Prospectus or any other document or material in connection with the offer or
sale, or invitation for subscription or purchase, of the Securities, whether
directly or indirectly, to the public or any member of the public in Singapore
other than (i) to an institutional investor or other person specified in Section
274 of the Securities and Futures Act 2001 of Singapore (the "SINGAPORE
SECURITIES AND FUTURES ACT"), (ii) to a sophisticated investor, and in
accordance with the conditions, specified in Section 275 of the Singapore
Securities and Futures Act or (iii) otherwise pursuant to, and in accordance
with the conditions of, any other applicable provision of the Singapore
Securities and Futures Act.
(c) Each Underwriter, severally and not jointly, agrees that:
14
(i) It has not offered or sold and will not offer or sell in
Hong Kong, by means of any document, any Securities other than (A) to
persons whose ordinary business is to buy or sell shares or debentures
(whether as principal or agent) or (B) in circumstances which do not
constitute an offer to the public within the meaning of the Companies
Ordinance (Cap. 32) of Hong Kong; and
(ii) Unless permitted to do so under the securities laws of
Hong Kong, it has not issued, or had in its possession for the purposes
of issue, and will not issue, or have in its possession for the
purposes of issue, any advertisement, invitation or document relating
to the Securities other than with respect to Securities intended to be
disposed of to persons outside Hong Kong or to be disposed of in Hong
Kong only to persons whose business involves the acquisition, disposal
or holding of securities, whether as principal or agent.
(d) Each Underwriter, severally and not jointly, agrees with
the Company, Converium Holding and Converium AG that such Underwriter
will comply with all securities laws and regulations that would
typically apply to transactions of the type contemplated herein in each
jurisdiction in which it acquries offers, sells or delivers Securities
or has in its possession or distributes the Prospectus or any other
material relating to the Company, Converium Holding or Converium AG or
the Securities.
5. PAYMENT OF EXPENSES. (a) Expenses. Whether or not the transactions
contemplated in this Underwriting Agreement are consummated or this Underwriting
Agreement is terminated, the Company, Converium Holding and Converium AG,
jointly and severally, agree to pay all expenses incident to the performance of
their obligations under this Underwriting Agreement including, but not limited
to, (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Underwriting Agreement, any Agreement among Underwriters,
the Indenture, the Subordinated Guarantee and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, (iv) the fees and
disbursements of Converium Holding, Converium AG and the Company's legal
counsels, accountants and other advisors, (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(e) hereof, including filing fees and the fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of a blue sky memorandum and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each Preliminary Prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (ix) any fees payable in
connection with the rating of the Securities, the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange,
(x) all "roadshow" or
15
similar expenses incurred in connection with the marketing of the Securities,
(xi) the fees and expenses incurred in connection with the approval by DTC,
Euroclear and Clearstream of the Securities for clearance through its system and
(xii) all taxes arising as a result of the sale and transfer of Securities by
the Company to or for the account of the Underwriters, the sale and transfer of
Securities by the Underwriters to each other and the sale and transfer of
Securities by the Underwriters to those purchasing such Securities from such
Underwriters including, in each such case, any stamp or other issuance or
transfer taxes or duties or income, capital gains, withholding, or other tax
imposed by Switzerland or Luxembourg or any political subdivision or taxing
authority thereof or therein (but excluding any tax on the income of any
Underwriter whose net income generally is subject to tax by Switzerland or
Luxembourg) asserted against an Underwriter or such purchaser by reason of the
purchase and sale of Securities pursuant to this Underwriting Agreement,.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters hereunder are subject to the following conditions:
(a) No Material Adverse Change in Business. Subsequent to the
execution and delivery of this Underwriting Agreement and prior to the
Closing Time, there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings or business affairs of Converium
Holding, Converium AG or the Company and their subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of
business, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Underwriting Agreement) that, in the judgment of the Representatives,
is material and adverse and that makes it, in the judgment of the
Representatives impracticable to market the Securities on the terms and
in the manner contemplated in the Prospectus.
(b) Effectiveness Of Registration Statement. The Prospectus
shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by the
rules and regulations under the Securities Act; all requests for
additional information on the part of the Commission shall have been
complied with; and the Registration Statement shall be effective and at
Closing Time no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall be in effect and no
proceedings for such purpose shall be pending before or threatened by
the Commission.
(c) Opinion of Swiss Counsel for Converium Holding and
Converium AG. At Closing Time, the Representatives shall have received
the opinion, dated as of the Closing Date, of Schellenberg Wittmer,
Swiss
16
counsel for Converium Holding and Converium AG, to the effect set forth
in Exhibit A hereto.
(d) Opinion of Luxembourg Counsel for Company. At Closing
Time, the Representatives shall have received the opinion, dated as of
the Closing Date, of Arendt & Medernach, Luxembourg counsel for the
Company, to the effect set forth in Exhibit B hereto.
(e) Opinion of General Counsel for Converium Holding. At
Closing Time, the Representatives shall have received the opinion,
dated as of the Closing Date, of Christian Felderer, Group General
Counsel of Converium Holding, to the effect set forth in Exhibit C
hereto.
(f) Opinion of U.S. Counsel for Company, Converium Holding and
Converium AG. At Closing Time, the Representatives shall have received
the opinion, dated as of the Closing Date, of Willkie Farr & Gallagher,
U.S. counsel for the Company, Converium Holding and Converium AG, to
the effect set forth in Exhibit D hereto.
(g) Opinion of U.S. Counsel for Underwriters. At Closing Time,
the Representatives shall have received the opinion, dated as of the
Closing Date, of Davis Polk & Wardwell, U.S. counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters with respect to the matters set
forth in clauses 1, 3, 4 and 10 (but only as to the statements in the
Prospectus under the caption "Underwriting") and the final
paragraph of Exhibit D hereto, in form and substance satisfactory to
the Underwriters.
(h) Opinion of Swiss Counsel for Underwriters. At Closing
Time, the Representatives shall have received the opinion, dated as of
the Closing Date, of Bar & Karrer, Swiss counsel for the Underwriters,
to the effect set forth in Exhibit E hereto.
(i) Opinion of Counsel for Trustee. At Closing Time, the
Representatives shall have received the opinion, dated as of the
Closing Date, of Pryor Cashman, counsel for the Trustee, to the effect
set forth in Exhibit F hereto.
(j) Officers' Certificates. At Closing Time, the
Representatives shall have received certificates in the form set forth
in Exhibits G-1, H-1 and I-1 hereto, dated the Closing Date and signed
by an executive officer of each of Converium Holding, Converium AG and
the Company, on behalf of Converium Holding, Converium AG and the
Company in such person's capacity as an officer.
17
(k) Accountant's Comfort Letter. At the time of the execution
of this Underwriting Agreement, the Representatives shall have received
from PricewaterhouseCoopers AG, independent public accountants, a
letter dated the date hereof containing statements and information of
the type ordinarily included in accountants' "COMFORT LETTERS" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.
(l) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from PricewaterhouseCoopers AG a
letter, dated as of the Closing Date, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (k)
of this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(m) Maintenance Of Rating. At Closing Time, the Securities
shall be rated at least Baa1 by Moody's and BBB+ by S&P, and the
Company shall have delivered to the Representatives a letter dated the
Closing Time, from each such rating agency, or other evidence
satisfactory to the Representatives, confirming that the Securities
have such ratings; and since the date of this Underwriting Agreement,
there shall not have occurred a downgrading in the rating assigned to
the Securities or any of the Company's, Converium Holding's or
Converium AG's other securities or the Company's, Converium Holding's
or Converium AG's financial strength or claims paying ability by any
"NATIONALLY RECOGNIZED STATISTICAL RATING AGENCY", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act, and no such organization shall have publicly announced
that it has under surveillance or review its rating of the Securities
or any of the Company's, Converium Holding's or Converium AG's other
securities or the Company's, Converium Holding's or Converium AG's
financial strength or claims paying ability.
(n) Approval Of Listing and Settlement. At Closing Time, the
Securities shall have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance, and approved for
settlement through DTC, Euroclear and Clearstream.
(o) Conditions to Purchase of Additional Securities. In the
event that the Underwriters exercise their option provided in Section
2(b) hereof to purchase all or any portion of the Additional Securities
at the relevant Date of Delivery, the several obligations of the
Underwriters to purchase Additional Securities hereunder shall be
subject to the condition that the Representatives shall have received:
18
(i) Officers' Certificates. Certificates in the form
as set forth in Exhibits G-2, H-2 and I-2 hereto, and signed
by an executive officer of each of Converium Holding,
Converium AG and the Company, on behalf of Converium Holding,
Converium AG and the Company in such person's capacity as an
officer.
(ii) Opinion of Swiss Counsel for Converium Holding
and Converium AG. The opinion of Schellenberg Wittmer, Swiss
counsel for Converium Holding and Converium AG, in form and
substance satisfactory to the Underwriters and otherwise to
the same effect as the opinion required by Section 6(c).
(iii) Opinion of Luxembourg Counsel for Company. The
opinion of Arendt & Medernach, Luxembourg counsel for the
Company, in form and substance satisfactory to the
Underwriters and otherwise to the same effect as the opinion
required by Section 6(d).
(iv) Opinion of General Counsel for Converium
Holding. The opinion of Christian Felderer, Group General
Counsel of Converium Holding, in form and substance
satisfactory to the Underwriters and otherwise to the same
effect as the opinion required by Section 6(e).
(v) Opinion of U.S. Counsel for Company, Converium
Holding and Converium AG. The opinion of Wilkie Farr &
Gallagher, U.S. counsel for the Company, Converium Holding and
Converium AG, in form and substance satisfactory to the
Underwriters and otherwise to the same effect as the opinion
required by Section 6(f).
(vi) Opinion of U.S. Counsel for Underwriters. The
favorable opinion of Davis Polk & Wardwell, U.S. counsel for
the Underwriters, in form and substance satisfactory to the
Underwriters and otherwise to the same effect as the opinion
required by Section 6(g).
(vii) Opinion of Swiss Counsel for Underwriters. The
opinion of Bar & Karrer, Swiss counsel for the Underwriters,
in form and substance satisfactory to the Underwriters and
otherwise to the same effect as the opinion required by
Section 6(h).
(viii) Opinion of Counsel for Trustee. The opinion of
Pryor Cashman, counsel for the Trustee, in form and substance
19
satisfactory to the Underwriters and otherwise to the same
effect as the opinion required by Section 6(i).
(ix) Bring-down Comfort Letter. A letter in form and
substance satisfactory to the Representatives, from
PricwaterhouseCoopers AG, independent public accountants,
substantially in the same form and substance as the letter
furnished to the Underwriters pursuant to Section 6(l), except
that the "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than 5 days prior to
the Date of Delivery.
(x) Maintenance Of Rating. Subsequent to the date of
this Underwriting Agreement, no downgrading shall have
occurred in the rating accorded the Securities or of any of
the Company's, Converium Holding's or Converium AG's other
securities by any "NATIONALLY RECOGNIZED STATISTICAL RATING
AGENCY", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act, and no
such organization shall have publicly announced that it has
under surveillance or review its ratings of any of the
Company's, Converium Holding's or Converium AG's securities or
the Company's, Converium Holding's or Converium AG's financial
strength or claims paying ability.
(p) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with
such documents and opinions as they may require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained.
(q) Termination Of Underwriting Agreement. If any condition
specified in this Section 6 shall not have been fulfilled when and as
required to be fulfilled, this Underwriting Agreement, or, in the case
of any condition to the purchase of Additional Securities on a Date of
Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Additional Securities may
be terminated by the Representatives by notice to the Company at any
time at or prior to Closing Time or such Date of Delivery, as the case
may be, and such termination shall be without liability of any party to
any other party except to the extent as provided in Sections 5 and 9
and except that Sections 1, 5 and 7 shall survive any such termination
and remain in full force and effect.
20
7. INDEMNIFICATION AND CONTRIBUTION.
(a) (i) The Company, Converium Holding and Converium AG,
jointly and severally, agree to indemnify and hold harmless each
Underwriter, each affiliate of any Underwriter which assists such
Underwriter in the distribution of the Securities and each person, if
any, who controls any Underwriter within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act (each, a
"CONTROL PERSON"), from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other
expenses as reasonably incurred in connection with defending or
investigating any such action or claim) arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof, any Preliminary
Prospectus or the Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or arising
out of any omission or alleged omission to state therein, in the light
of the circumstances in which they were made, a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or
liabilities arise out of any such untrue statement or omission or
alleged untrue statement or omission based upon Underwriter
Information.
(ii) The indemnity with respect to any Preliminary
Prospectus or the Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements
thereto), described in Section 7(a) shall not inure to the
benefit of any Underwriter from whom the person asserting such
losses, claims, damages or liabilities purchased Securities,
if a copy of the Prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the
sale of the Securities by the Company to such person, and if
the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such losses, claims, damages
or liabilities.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, Converium Holding and
Converium AG, and each person, if any, who controls the Company
Converium Holding and Converium AG within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company, Converium Holding
and Converium AG to such Underwriter, but only with reference
21
to information in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendments or supplements thereto
based upon Underwriter Information and only to the extent that such
information is untrue or omits material information.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to paragraphs 7(a) or 7(b) of
this Section 7, such person (the "INDEMNIFIED PARTY") shall promptly
notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing, but the failure to notify the
indemnifying party shall not relieve it from liability which it may
have to any indemnified party; the indemnifying party, upon request of
the indemnified party, shall retain counsel reasonably satisfactory to
the indemnified party to represent the indemnified party and any others
the indemnifying party may designate in such proceeding and shall pay
the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm (in addition to any local
counsel) for (a) all Underwriters, affiliates and all persons, if any,
who control any Underwriter within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act and (b) the
Company, Converium Holding or Converium AG, their directors, their
officers who sign the Registration Statement and each person, if any,
who controls the Company, Converium Holding or Converium AG within the
meaning of either such Section. All such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm
for the Underwriters, affiliates and any controlling persons of any
Underwriters, such firm shall be jointly designated in writing by the
Representatives. In the case of any such separate firm for Converium
Holding, Converium AG and the Company, and any directors, officers and
controlling persons of the Company, Converium Holding or Converium AG,
such firm shall be designated in writing by Converium Holding,
Converium AG and the
22
Company. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled
with such consent or if there be a judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement (i) includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding and (ii) does not include any
statement as to an admission of fault, culpability or a failure to act
by or on behalf of any indemnified party.
(d) To the extent the indemnification provided for in
paragraphs 7(a) and 7(b) of this Section 7 is unavailable to an
indemnified party or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by Converium Holding, Converium AG and the
Company on the one hand and the Underwriters on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of Converium Holding,
Converium AG and the Company on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received
by Converium Holding, Converium AG and the Company on the one hand and
the Underwriters on the other hand in connection with the offering of
the Securities shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Securities (before
deducting expenses) received by Converium Holding, Converium AG and the
Company and the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate initial public offering
price of the Securities as set forth on such cover. The relative fault
of Converium Holding, Converium AG and the Company on the one hand and
the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact
23
relates to information supplied by Converium Holding, Converium AG or
the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) Converium Holding, Converium AG, the Company and the
Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph 7(d)
of this Section 7. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages and liabilities referred to
in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages
that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, Converium Holding and Converium
AG, each officer of the Company, Converium Holding and Converium AG who signed
the Registration Statement, and each person, if any, who controls the Company,
Converium Holding or Converium AG within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company, Converium Holding or Converium AG. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the principal amount of Firm Securities set forth
opposite their respective names in Schedule A hereto and not joint.
(f) The indemnity and contribution provisions contained in
this Section 7 and the representations, warranties and other statements
of
24
Converium Holding, Converium AG and the Company contained in this
Underwriting Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Underwriting
Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, or Converium
Holding, Converium AG or the Company, their respective officers or
directors or any person controlling Converium Holding, Converium AG and
the Company and (iii) acceptance of and payment for any of the
Securities.
8. TERMINATION OF UNDERWRITING AGREEMENT.
(a) Termination. This Underwriting Agreement shall be subject
to termination by notice given by the Representatives to the Company,
if (a) after the execution and delivery of this Underwriting Agreement
and prior to the Closing Time (i) there has been any material adverse
change or any developments likely to result in a material adverse
change in the condition financial or otherwise, or in the earnings or
business affairs of Converium Holding, Converium AG or the Company and
their subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, (ii) trading generally shall have
been suspended or materially limited on or by, as the case may be, any
of the SWX Swiss Exchange, the New York Stock Exchange or the National
Association of Securities Dealers, Inc., (iii) trading of any
securities of Converium Holding, Converium AG or the Company shall have
been suspended on any exchange or in any over-the-counter market, (iv)
a general moratorium on commercial banking activities in Switzerland,
Luxembourg or New York shall have been declared by Swiss, Luxembourg or
United States Federal or New York State authorities, respectively, or
(v) there shall have occurred any outbreak or escalation of hostilities
or any change in financial markets or any calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions that, in the
judgment of the Representatives is material and adverse, or a material
disruption has occurred in commercial banking or securities settlement
or clearance services in the United States, Luxembourg or Switzerland
and (b) in the case of any of the events specified in clauses 8(a)(i)
through 8(a)(v), such event, singly or together with any other such
event, makes it, in the judgment of the Representatives, impracticable
to market the Securities on the terms and in the manner contemplated in
the Prospectus.
9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. This Underwriting
Agreement shall become effective upon the execution and delivery hereof by the
parties hereto.
25
If, on the Closing Time or a Date of Delivery, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Securities that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
number of the Securities to be purchased on such date, the non-defaulting
Underwriters shall be obligated severally in the proportions that the number of
Firm Securities set forth opposite their respective names in Schedule A hereof
bears to the aggregate number of Firm Securities set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as the
Representatives may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Securities that any
Underwriter has agreed to purchase pursuant to this Underwriting Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
number of Securities without the written consent of such Underwriter. If, on the
Closing Time, any Underwriter or Underwriters shall fail or refuse to purchase
any Firm Securities and the aggregate number of Firm Securities with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Securities to be purchased, and arrangements satisfactory to the
Representatives, Converium Holding, Converium AG and the Company for the
purchase of such Firm Securities are not made within 36 hours after such
default, this Underwriting Agreement shall terminate without liability on the
part of any non-defaulting Underwriter, Converium Holding, Converium AG or the
Company. In any such case, either the Representatives, Converium Holding,
Converium AG and the Company shall have the right to postpone the Closing Time,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, on a Date of Deliver, any
Underwriter or Underwriters shall fail or refuse to purchase any Additional
Securities and the aggregate number of Additional Securities with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Securities to be purchased, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase
Additional Securities or (ii) purchase not less than the number of Additional
Securities that such non-defaulting Underwriters would have been obligated to
purchase in the absence of such default. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Underwriting Agreement.
If this Underwriting Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of Converium
Holding, Converium AG or the Company to comply with the terms or to fulfill any
of the conditions of this Underwriting Agreement, or if for any reason Converium
Holding, Converium AG or the Company shall be unable to perform
26
its obligations under this Underwriting Agreement, Converium Holding, Converium
AG and the Company, jointly and severally, agree to reimburse the Underwriters
or such Underwriters as have so terminated this Underwriting Agreement with
respect to themselves, for all out-of-pocket expenses (including the reasonable
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Underwriting Agreement or the offering
contemplated hereunder. It is understood and agreed that the Representatives and
the Underwriters shall not be entitled to any out-of-pocket expenses if this
Agreement is terminated pursuant to the second paragraph of this Section 9.
10. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to the Representatives c/o Merrill Lynch at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Scott Hendry,
Capital Markets Legal Group; and notices
to the Company, Converium Holding and Converium AG shall be directed to them c/o
Converium Holding AG at General Guisan-Quai 26, 8002 Zurich, Switzerland,
attention of Christian Felderer.
11. PARTIES. This Underwriting Agreement shall each inure to the
benefit of and be binding upon the Underwriters and the Company, Converium
Holding and Converium AG and their respective successors. Nothing expressed or
mentioned in this Underwriting Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Company, Converium Holding and Converium AG and their respective successors and
the controlling persons and officers and directors referred to in Section 7 and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Underwriting Agreement or any provision herein
contained. This Underwriting Agreement and all conditions and provisions hereof
are intended to be for the sole and exclusive benefit of the Underwriters and
the Company, Converium Holding and Converium AG and their respective successors,
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
12. GOVERNING LAW. THIS UNDERWRITING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
13. SUBMISSION TO JURISDICTION. Each of Converium Holding, Converium AG
and the Company irrevocably agrees that any legal suit, action or proceeding
brought by any Underwriter or by any person controlling any Underwriter within
the meaning of either Section 15 of the Securities Act or
27
Section 20 of the Exchange Act arising out of or based upon this
Underwriting Agreement or the transactions contemplated hereby may be,
but is not required to be, instituted in any state or Federal court in
the Borough of Manhattan, The City of New York, New York, United States
of America, and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of
the venue in such courts of any such suit, action or proceeding, and
irrevocably submits to the non-exclusive jurisdiction of any such court
in any such suit, action or proceeding. Each of Converium Holding,
Converium AG and the Company irrevocably waives any immunity to
jurisdiction to which it may otherwise be entitled or become entitled
(including immunity to pre-judgment attachment and execution) in any
legal suit, action or proceeding against it arising out of this
Underwriting Agreement or the transactions contemplated hereby which is
instituted in any state or Federal court in the Borough of Manhattan,
The City of New York, New York, United States of America, or in any
competent court in Switzerland or Luxembourg. To the extent permitted
by law, Converium Holding, Converium AG and the Company hereby waive
any objection to the enforcement by any competent foreign court of any
judgment validly obtained in any such proceeding. Converium Holding,
Converium AG and the Company hereby designate and appoint Corcoran
Byrne, Esq., General Counsel of Converium Holdings (North America) Inc.
as their authorized agents to accept and acknowledge on their behalf
service of any and all process which may be served in any such suit,
action or proceeding in any such court, expressly consent to the
jurisdiction of any such court in any such suit, action or proceeding,
and waive any other requirements of or objections to personal
jurisdiction with respect thereto. Such appointment shall be
irrevocable subject to the appointment of a successor agent in the
United States on terms substantially similar to those contained in this
Section 13 and reasonably satisfactory to the Representatives.
Converium Holding, Converium AG and the Company agree that service of
process upon Corcoran Byrne Esq., General Counsel, at Converium
Holdings (North America) Inc., One Chase Manhattan Plaza, New York, NY
10005, United States (or such other address in the United States as
Converium Holding, Converium AG and the Company may designate by
written notice to the Representatives) and written notice of such
service to Converium Holding, Converium AG and the Company shall be
deemed in every respect effective service of process upon Converium
Holding, Converium AG and the Company in any such suit, action or
proceeding and shall be taken and held to be valid personal service
upon Converium Holding, Converium AG and the Company in any such suit,
action or proceeding. Converium Holding, Converium AG and the Company
represent and warrant that prior to the Closing Time, Corcoran Byrne
will have agreed to act as said agent for service of process and agrees
to take all action that may be necessary to continue the designation
and appointment of Corcoran Byrne (or a successor agent in the United
States), in full force and effect so that Converium Holding, Converium
AG and the Company shall at all times have an agent for service of
process for the above purposes in the
28
United States. Notwithstanding the foregoing, any action arising out of or based
on this Underwriting Agreement or the transactions contemplated hereby may be
instituted by any Underwriter or by any person controlling any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act in any competent foreign court.
14. PAYMENT IN DOLLARS. All payments to be made hereunder shall be made
in U.S. dollars.
15. EFFECT OF HEADINGS. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
16. COUNTERPARTS. This Underwriting Agreement may be signed in two or
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company, Converium Holding and Converium AG in
accordance with its terms.
Very truly yours,
CONVERIUM FINANCE S.A.
By:
Name:
Title:
CONVERIUM AG
By:
Name:
Title:
CONVERIUM HOLDING AG
By:
Name:
Title:
30
Confirmed and Accepted
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
Acting severally on behalf of themselves
and as Representatives of the other
Underwriters named in Schedule A hereto.
By: MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By:
Name:
Title:
By: J.P. MORGAN SECURITIES INC.
By:
Name:
Title:
31
SCHEDULE A
Principal Amount
Name of Underwriter of Securities
- ------------------- -------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......................... [-]
J.P. Morgan Securities Inc.................................................. [-]
[OTHERS].................................................................... [-]
-------------
TOTAL....................................................................... [-]
==============
Sch A-1
SCHEDULE B
1. The initial public offering price of the Securities shall be [-]% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be [-]% of the principal amount thereof.
3. The interest rate on the Securities shall be [-]% per annum.
Sch B-1
SCHEDULE C
List of Significant Subsidiaries
- - Converium AG
- - Converium Ruckversicherung (Deutschland) AG
- - Converium Holding (North America) Inc.
- - Converium Reinsurance (North America) Inc.
Sch C-1
SCHEDULE D
Sch D-1